2016 Analyst Meeting Scott Ernest
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2016 Analyst Meeting Scott Ernest TEXTRON AVIATION Forward-looking statement Certain statements in today’s discussion will be forward-looking statements, including those that discuss strategies, goals, outlook or other non-historical matters; or project revenues, income, returns or other financial measures. These forward-looking statements speak only as of the date on which they are made, and we undertake no obligation to update or revise any forward-looking statements. These forward-looking statements are subject to risks and uncertainties that may cause actual results to differ materially from those contained in the statements, including the risks and uncertainties set forth under our full disclosure located at the end of this presentation and included in our SEC filings. 2 TEXTRON AVIATION Agenda • Overview • Accomplishments • Market • Product Update • Defense • Operations 3 TEXTRON AVIATION Broadest product lineup in the industry JETS TURBOPROPS PISTONS DEFENSE Citation Hemisphere Citation XLS+ King Air 350i/ER Baron G58 AT-6 Citation Longitude Citation CJ4 King Air 250 Bonanza G36 T-6C King Air C90GTx Scorpion Citation X+ Citation CJ3+ TTx Denali Turbo Stationair HD Citation Sovereign+ Citation M2 Skylane Grand Caravan EX Citation Latitude Citation Mustang Caravan Skyhawk 4 TEXTRON AVIATION Fastest product development in the industry Faster product development Average Development Time • Quicker response to market conditions • Products to customers on time, as expected • Technology customers value • Maximize return Textron Aviation Other OEMs Best in class products in half the time Source: Estimated time from program start to EIS. 5 TEXTRON AVIATION Largest installed base in the industry Delivered 250,000+ aircraft in 170+ countries 6 TEXTRON AVIATION Most comprehensive service network in the industry 3,300 Service network employees 19 Company-owned service centers 382 Authorized service facilities 60 Mobile Service Units 7 2016 Accomplishments TEXTRON AVIATION 2016 accomplishments • Citation Longitude first flight • Citation Latitude strong deliveries • Cessna Denali introduced • Delivered 5000th Citation Light Jet • Delivered 7000th Citation • Scorpion-CRADA / Weapons test • Vertical integration 9 Market MARKET Investment focus – expanding our reach Actual Forecast Jets Investing in Longitude & Hemisphere $30 Billions $25 Area of focus $20 Ultra Long Range $15 Large Midsize $10 Value (in 2016 USD) Value (in Light $5 2021 Segment Size $0 $9.5B+ 2011 2013 2015 2017 2019 2021 2023 2025 for midsize and large jets Actual Forecast Turboprops $2.5 Investing in Denali Billions $2.0 Area of focus $1.5 Multi-Engine Single Engine $1.0 Utility Value (in 2016 USD) Value (in 2021 Segment Size $0.5 $700M+ $0.0 2011 2013 2015 2017 2019 2021 2023 2025 for single engine turboprops Investing in new segments Source: Blend of internal, JetNetIQ, Honeywell forecast 11 Product Update PRODUCT UPDATE Expanding our reach Citation Latitude 2,700 nm EIS 2015 Citation Longitude 3,500 nm First Flight Complete Estimated EIS 2017 Citation Hemisphere 4,500 nm FIRST FLIGHT 2019 13 PRODUCT UPDATE Citation Latitude success 40+ aircraft delivered Over 9,000 fleet hours 14 PRODUCT UPDATE NetJets 7000th Citation delivery ceremony • Currently operates over 225 Citations • Potential for 200 aircraft • 7000th Citation delivered to NetJets • 2016 NetJets OEM supplier of the year 15 PRODUCT UPDATE Citation Longitude first flight 16 CITATION LONGITUDE Rapid product development Summer 2014 Summer 2016 Optimizing facility footprint 17 CITATION LONGITUDE Best in class Citation Gulfstream Challenger Legacy 500 Longitude 280 350 Range ≥ 3500 nm Maximum Operating Speed ≥ M0.84 Full Fuel Payload ≥ 1600 lbs Total DOC < $2000/hr Quietest cabin in class EVS & HUD 18 Product Update Citation Hemisphere Max Range Diameter Ownership Cost 4,500 nm 102 in. Best in class First flight 2019 19 CITATION HEMISPHERE Best in class Citation Challenger Gulfstream Falcon Legacy 650 Hemisphere 650 450 2000LXS Range ≥ 4500 nm Maximum Operating Speed ≥ M0.90 3-Zone Cabin Fuselage Diameter ≥ 102 inches 20 CESSNA DENALI Outperforming the competition Range High Speed Cruise Full Fuel Payload 1,600 nm 285 kts 1,100 lbs 21 CESSNA DENALI Best in class Cessna Denali Pilatus Daher Piper PC-12 TBM 930 M600 Range ≥ 1600 nm High Speed Cruise ≥ 285 kts Full Fuel Payload ≥ 1100 lb Total DOC < $615/hr Cabin Width > 60 inches NOTE: Range with 4 pax at High Speed Cruise 22 PRODUCT UPDATE Wheels Up • 54 King Air 350i’s in fleet • 3550+ memberships sold since inception (Fall 2013) • Over 50% increase y/y in new memberships sold through September 23 Defense and Special Missions DEFENSE & SPECIAL MISSIONS Scorpion program update • Scorpion (D1) 750+ hours to date • Successful live fire test • Pursuing numerous domestic and international sales opportunities • CRADA agreement signed – “Non-DOD Military Aircraft Airworthiness Accreditation” program – Process underway Scorpion-versatile, capable & cost effective 25 DEFENSE & SPECIAL MISSIONS Special Missions • Single-engine & multi-engine turboprop aircraft are favored platforms – Cost-effective solutions • ISR missions are the largest opportunity for Textron Aviation special missions – 40% of SM aircraft are ISR configurations – Border and maritime patrol – Counterterrorism – Economic exclusionary zones 26 Operations Operations Vertical integration in manufacturing Assembly Composites Fabrication Interiors 28 TEXTRON AVIATION Summary • New products drive growth • Investing in our products, service and people • Best-in-class product development capability • World-class manufacturing 29 TEXTRON AVIATION Questions 30.